Dubai Group sells stake in Egyptian investment firm

Abu Dhabi: Dubai Financial Group Thursday sold a quarter of its stake in the Egyptian investment bank EFG-Hermes for Dh437.2 million, the Cairo and Alexandria Stock Exchange Disclosure Department has confirmed to Gulf News.

EFG-Hermes said the shares were sold at an average price of 26.1 Egyptian Pounds (EGP), or Dh17.5. The company said its board of directors has remained unchanged following the sale.

Dubai Group, the financial service arm of the Dubai Government-owned Dubai Holding, sold 25 million shares, still leaving it as the largest shareholder in EFG-Hermes with a 19 per cent stake.

The sale confirms warnings by several financial research centres, including Barclays, that Dubai Holding is likely next in line for restructuring after Dubai World, another wholly-owned investment vehicle of the Dubai Government announced two weeks ago it would undergo a restructuring program in order to meet its debt obligations.

Dubai Group has so far declined to comment on the transaction, but its spokeswoman said the company would issue a statement later today.

EFG-Hermes shares yesterday lost more than 7 per cent to close at 25.8 Egyptian Pounds (EGP) (Dh17.3) per share. At mid-day trading today, the company’s shares traded slightly higher at EGP 26.3 (Dh17.6).

Dubai Group acquired its stake in EFG-Hermes, the Arab world’s largest publicly-traded investment bank, in November 2007 from Abraaj Capital for $1.1 billion (Dh4 billion) or more than EGP 63 (Dh42) per share.